By Santhosh V Perumal/Business Reporter
Qatar Exchange (QE), which is aiming to be the preferred investment destination in the region, could get a shot in the arm with many UK and international companies evincing interests in cross listing their equities in local bourses in the Gulf region, according to a top official of London Stock Exchange (LSE).
Moreover, there is also “strongest” potential from Qatari companies to list their shares on the LSE, particularly from the infrastructure, financial services, telecom, retail and tourism sectors, Richard Webster-Smith, manager, primary markets (Middle East and Africa), LSE, told Gulf Times in an exclusive interview.
“I think in the medium term many UK companies or international companies are looking at cross listing in the region but the market should be able to offer appropriate structures and regulatory models,” Smith (pictured) said, when asked whether LSE listed firms are looking at listing their shares on QE and other Gulf bourses.
International companies that are potentially active in Islamic finance would want to match their activities with investors’ base here, Smith said, adding he has found interest from a small number of (LSE listed) entities that have a presence or profile here.
“I think as capital markets become more globalised, there is huge opportunity for further cross listings in this market from outside,” he said, stressing that it is a part of capital market development seen here in the region.
Pointing out that LSE has an open dialogue with all the major exchanges in the region through international bodies and federation of exchanges; he said in all those discussions, it is all about reducing barriers to listing and harmonising global capital flows.
Finding that many international companies are looking for cross listings at the GCC level, he said the challenge for the exchanges in the region is to create structures to allow cross listings.
Observing recovering primary market sentiments in the GCC; Smith said “we have a building pipeline of GCC companies (seeking listing) in London in the future.”
“We have strong sense that Qatari companies will be among them to seek listing in London,” he said declining to give the numbers. Ooredoo (formerly Qtel) and Commercialbank had listed their depository receipts in 2009 and 2008, respectively; while Qatar Investment Fund shares, which were earlier in Alternative Investment Market, was shifted to the main bourse in 2011.
“Qatar has one of the best developed, most active and liquid markets in the Gulf region. It is entirely natural for Qatari companies to list on that markets and what London offers is something complementary to Qatar listing and listing that will give them more broader international investor base and reach,” according to him.
The strength of Qatari market will certainly benefit the Qatari companies looking to access capital from the region or overseas, he said, adding a local listing could be a “stepping stone” for a potential listing at LSE.
Last year, LSE witnessed the successful listing of Abu Dhabi-based NMC Health, which was able to garner about $180mn from the market and its share price has seen about 60% increase since the listing, he said.
“The successful share price performance and liquidity pool in the London have meant that other companies in the UAE, Qatar, and Kuwait are looking at potential listing in LSE,” he said.
“Certainly 2022 World Cup, the huge infrastructure investment and growth opportunities in Qatar have really risen up international investors agenda and investors are very aware of huge growth opportunities available in Qatar, he said, adding potentialities existed for infrastructure, financial services, telecommunication and tourism and leisure sectors.
“International investors want greater exposure to these sectors and certainly these are the sectors of vanguard of opportunities we see for listing for the London market,” he said.
“Companies in Qatar, in particular, have made very significant steps in transforming themselves in announcing their corporate governance, disclosure and other standards that meet the international investors’ expectations.
“We see that progress had reduced some of the barriers towards accessing international investors or listing in the global markets,” Smith added.
Certainly, the bourses in Qatar and Saudi Arabia have been witnessing new issue activity and good liquidity since financial crisis.
The activity in Qatar is helping and will further help companies list here and “we may see some of the existing companies to look for additional listing internationally,” he said.
